Critics target not just the cost of clean energy itself but also the federal subsidies designed to support it. Badly needed now are more market-oriented and cost-effective ways to scale up clean energy development by leveraging the power of private finance.

Which is why it is good news that a recent “scoring” by the congressional Joint Committee on Taxation (JCT) suggests that the “Master Limited Partnership Parity Act” currently being considered could reduce not only the cost of clean energy but also the subsidies that support it.

Combining the tax benefits of a partnership with the fundraising advantages of a corporation, master limited partnerships (MLPs) are a widely-used investment vehicle that could accelerate the scale-up of clean energy by leveraging the power of capital markets.

Since the early 1980s, MLPs have raised over $400 billion for oil, gas, and other fossil energy infrastructure, at a significantly lower cost of capital than current U.S. clean energy finance. At a time when the cost declines of clean energy equipment have far outpaced declines in the cost of capital and other “soft costs”, financing charges can raise the overall cost of clean energy by up to 50 percent.  Clean energy MLPs could match continuing technology cost improvements with much needed capital cost reductions.

via Clean Energy Scores a Success with the Master Limited Partnership Parity Act | Brookings Institution.